The primary cause of most medical practices’ disappointing balance sheets is unmonitored and unmanaged expenses.  Practice inefficiencies can occur in every corner of the office, from exam rooms to payroll to technology, and many practice managers are reluctant to make changes, particularly when it comes to personnel. 

Most practice managers can think of several glaring and possibly guilt-inducing inefficiencies just from reading the word “inefficiencies.”  Take care of the easy ones first.  Once a complete audit of the offending expense has been conducted, it’s time to take action.  But don’t stop there.  After the glaring inefficiencies have been eliminated, an audit of your practice’s expenses, their related functions, and the return on investment (ROI) for those expenses should highlight additional areas that require attention. 

When it comes to eliminating inefficiencies, it stands to reason that some are easier to take care of, whether in a practical sense, an emotional sense, or both.  For example, it’s much simpler to clean out an extra exam room that’s been used for storage so excess inventory can be eliminated and more usable workspace created than it is to fire one or more staff members.   

If an expense audit shows that staff eliminations need to be made, try to think creatively.  Many medical practices have avoided layoffs by asking certain staff members to reduce their work hours instead.  This may be particularly helpful if you keep your practice open at night and/or on weekends; staff members who work during those times may actually appreciate having a few extra hours off each week. 

If there’s no way to avoid layoffs, bite the bullet and do it.  When terminating employees, be sure to consider the safety of yourself and the rest of the staff.  Remain objective during the exit interview and protect the released employee’s dignity by avoiding discussions of performance, even if poor job performance influenced your decision. 

In some cases, an audit may reveal that expenses actually need to increase in the short term in order for the inefficiency to be removed.  The most obvious example here is a software upgrade that allows you to make better use of staff time or add services that will increase revenue.  Obviously, such expenditures should be carefully considered; just don’t let fear of the future stop you from making the necessary changes.   

Even if after reading this, you still think the recession is responsible for your medical practice’s smaller profits, it’s critical to realize that what we see in today’s society shouldn’t be viewed as a temporary setback.  The US economy has suffered a sea change, and your medical practice must be willing to self-audit and make adjustments to meet the changed circumstances in order to thrive in the future.